Governor monitoring dicey state budget

Special legislative session still an option

Aug 30, 2017

By Rod Boshart, Gazette Des Moines Bureau

DES MOINES — Gov. Kim Reynolds said Tuesday she expects to decide in September whether it will be necessary to call lawmakers into special session to address a projected state budget shortfall or if she can take on financial problems using executive transfers.

“We’re monitoring that every single day,” Reynolds told her weekly news conference. “We officially close the books on Oct. 1 and so we’ll be making those decisions in the near future.”

The fiscal 2017 budget year ended June 30, but state officials in the following weeks rectify accruals, transfers, collections and other accounting before finalizing the balance sheets.

Lawmakers and former Gov. Terry Branstad, who left in May to become U.S. ambassador to China, already had to make nearly $118 million through cuts and adjustments as well as borrow $131 million from reserves before state tax collections finished on a lackluster note in June.

Reynolds says she has the authority without legislative approval to transfer up to $50 million more from reserves to cover a further shortfall. Early projections by the nonpartisan Legislative Services Agency indicate the projected shortfall could exceed that amount, but the governor said Tuesday it’s still not clear if a special legislative session will be needed.

Cedar Rapids Mayor Ron Corbett, a candidate for governor who faces Reynolds in next June’s GOP primary, expressed concern to reporters Tuesday that her budget officials may attempt to “cook the books” by using “creative accounting” tricks to address a fiscal 2017 shortfall.

But the governor’s aides flatly denied that assertion, and Reynolds said whatever steps are taken will be done in full public view.

Reynolds also defended her administration’s decision to provide nearly $20 million in state tax incentives over five years to land Apple Inc.’s $1.3 billion data center project and its 50 permanent jobs against criticism from Democrats, Republicans and some media outlets who say the tax breaks are too generous.

Reynolds said the Iowa incentives amount to $3.9 million annually, noting “it’s a tax credit so if they don’t perform, they get nothing.”

Also, she said critics need to look at the long-term benefit the project brings to Iowa and its supply-chain companies. “This is a global company that put Iowa on the world stage,” she told reporters. “I think it solidifies that Iowa is a tech and innovation hub.”

Also Tuesday, Reynolds, acting Lt. Gov. Adam Gregg and Iowa Department of Transportation Director Mark Lowe used the news briefing to urge drivers — now that school is in session — to use caution around buses to look out for children.

Riding a school bus is one of the safest ways for children to travel to school, Gregg said, but getting on and off a bus can be dangerous. Each school bus has a 10-foot “danger zone” around it, making it hard to see children trying to get on or off a bus or cross a highway.

Iowa passed a law in 2012 that increased criminal penalties for passing a stopped school bus, resulting in the suspension of a person’s driving privileges if convicted.

“Unfortunately, even with these increased penalties, we still have drivers who disobey the law,” Reynolds said, noting that “in 2016, we saw 581 convictions in Iowa for failure to stop for a school bus.”